Wealthy Investors Discover Timberland
By JEFF OPDYKE
For some people, money does grow on trees.
Whipsawed by gyrating markets in recent years, some investors are taking root in a little-understood asset class that since 1987 has handily beaten stocks—timberland. A dollar invested in the National Council of Real Estate Investment Fiduciaries’ Timberland Index then was worth nearly $21 at the end of 2009, a compounded annual return of more than 14%. That same dollar invested in the Standard & Poor’s 500-stock index was, with dividends included, worth $7.83, a return of about 9.4% a year.
Returns aren’t the only attraction. Timber historically has tracked the consumer-price index, thus serving as an effective inflation hedge. And aside from timber sales, timberland can generate income through hunting leases, watershed rights, energy-exploration easements and other uses.
[BLOGGER COMMENT: Additional income can also be achieved by selling carbon offset credits. Currently in discussions with several owners of 10,000 or more acres of timberland in multiple locations worldwide to create an income stream by selling the carbon sequestration ability of their timberland to household name companies looking to "green" their image.]
